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Gold briefly dipped below the $3,000 mark during early Monday trading.
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Investors continue to view bullion as a safe haven amid U.S. stagflation concerns.
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The metal attempts to rebound toward its opening level near $3,040.
Gold (XAU/USD) recovered to trade near $3,040 on Monday after an early-session plunge of 2% pushed prices below the $3,000 threshold. The precious metal showed resilience as global equities, the US Dollar, and bond yields all declined in tandem.
The market's sharp reaction came after China retaliated with fresh tariffs against the US, escalating the ongoing trade war and stoking investor fears.
Stagflation Fears and Fed Rate Cut Bets Support Gold
- Despite initial pressure, gold regained ground as markets continued to favor bullion as a safe-haven asset in a stagflation scenario. Investors are now turning their attention to upcoming US inflation data, which is expected to reflect the impact of economic policies under President Donald Trump.
- Traders are increasingly pricing in aggressive monetary easing, with the CME FedWatch Tool showing a 49.3% probability of a rate cut in May—up sharply from 33.3% last Friday. By June, markets expect cuts to continue, with a 53.5% chance of rates dropping to the 3.75%-4.00% range from the current 4.25%-4.50%.
- Amid rising tensions, billionaire hedge fund manager Bill Ackman called on President Trump via X (formerly Twitter) to pause the current tariffs and prioritize a trade deal, warning that confidence among business leaders is waning. Meanwhile, the People’s Bank of China (PBoC) increased its gold reserves for the fifth consecutive month in March, adding 0.09 million troy ounces. The move signals China's continued preference for gold as a hedge against growing global trade and geopolitical risks.
Technical Outlook: Bulls Buy the Dip, Resistance Looms
From a technical perspective, gold saw strong buying interest below $3,000, helping prices rebound quickly. Key resistance is clustered around the $3,060 zone, including the $3,057 technical barrier and the $3,063 daily pivot. A breakout above this area could open the path toward the intraday R1 level at $3,111, with the all-time high of $3,167 as the next upside target.
On the downside, support at $3,004 and $2,990 was briefly breached, but buyers stepped in swiftly. If gold dips again, the $2,955 pivot and $2,942 S2 level are expected to act as strong support and prevent a deeper drop below $2,940.
XAU/USD: Daily Chart
